Job grade camouflage: When low gender pay gap does not mean equal pay

Jan Cadil (), Martin Kopecky () and Tomas Jurcik ()
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Jan Cadil: Unicorn University, Department of Economics and Management, Prague, Czech Republic
Martin Kopecky: BDAdvisory, Prague and University of Economics, Department of Management, Prague
Tomas Jurcik: BDAdvisory, Prague and University of Economics, Department of Management, Prague

International Journal of Economic Sciences, 2022, vol. 11, issue 2, 28-47

Abstract: “Equal pay for equal work” is one of the backbone principles of Responsible Leadership. It is also deeply incorporated in legislation, mostly in developed countries. In recent decades, the gender pay gap has been put forward as a general indicator of equality by policy makers and researches alike. Yet, the research outcomes are disturbingly unsettled in comparison to bold political proclamations that are often based on simplified statistics. In our article we show, that gender pay gap shrinks substantially if firm-level job grades (based on Hay methodology) are used. The methodology used is gender neutral and focuses solely on the job size, not on the incumbent. Moreover, we show that the gender pay gap is not reflecting the idea of “equal pay for equal work” well. In fact, we conclude that people are being paid unequally regardless their gender. Low or non-existent gender pay gap then might just camouflage real inequalities leading managers and stakeholders to false feeling that company follows responsible leadership principles as defined by Steve Kempster (2016).

Keywords: gender pay gap; equal pay; responsible leadership; job grade decomposition (search for similar items in EconPapers)
JEL-codes: J01 (search for similar items in EconPapers)
Date: 2022
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